Thyssenkrupp completes $20.4 billion sale of elevator business

German steelmaker Thyssenkrupp has successfully completed the 17.2 billion euro ($20.4 billion) sale of its elevator business to a  consortium led by Advent International and Cinven, marking a, important milestone in the transformation of the company. The transaction closed on Friday (31 July) after all regulatory and customary approvals, the company said.

Thyssenkrupp, on 27 February 2020, signed an agreement on the sale of the elevator business with a consortium of Advent International and Cinven, with Germany’s RAG foundation acting as a co-investor.
With the closing, Thyssenkrupp also received the contractually agreed purchase price.
“The transaction will result directly in a substantial reduction in debt to a net cash position and a significant increase in equity. The group’s balance sheet ratios will thus improve significantly. At the same time, Thyssenkrupp will be able to considerably reduce past balance sheet burdens,” the company stated in release.
Thyssenkrup plans to use part of the proceeds to selectively develop the businesses where attractive target returns can be achieved. In addition, funds may be used for necessary restructuring measures.
However, in view of the uncertain economic situation caused by the coronavirus, the company said it would retain the greatest possible flexibility in the precise allocation of funds.
To secure liquidity in the coronavirus crisis Thyssenkrupp AG had entered into a €1 billion credit facility under the KfW special programme. The company did not draw on this credit facility and it will end with the closing of the Elevator transaction.
“Divesting the elevator business with its more than 50,000 employees was a tough decision that was not easy for anyone but it was indispensable in the interests of the whole group of companies. The proceeds in the billions will give us tailwind for the transformation of thyssenkrupp,” Martina Merz, CEO of Thyssenkrupp AG. 
“We are continuing to focus all our energies on substantially improving the performance of the remaining businesses. We wish our Elevator colleagues continued success and all the best for the future,” she added.
With the closing, the employee representatives on the supervisory board, Susanne Herberger, chairwoman of the works council of thyssenkrupp Elevator AG, will leave the supervisory board of thyssenkrupp AG. She will be succeeded by Tekin Nasikkol, chairman of the general works council of thyssenkrupp Steel Europe AG, the company stated.
The sale of the elevator business is part of the strategic transformation of thyssenkrupp into a powerful “group of companies” with independent businesses, a strong umbrella brand, a lean holding company, and a focus on systematically improving the performance of all businesses.